China Stocks Rally: Consumer and Energy Gains Steal the Spotlight

China's stock market closed higher on Wednesday, driven by growth in consumer and energy sectors. A private survey revealed that the country's services activity expanded at the quickest rate seen in three months this January.

The blue-chip CSI300 Index saw a rise of 0.8%, while the Shanghai Composite Index increased by 0.9%. Over in Hong Kong, the Hang Seng Index edged up by 0.1%. The positive services data, boosted by new orders and faster hiring, contrasts the persistent economic weaknesses in manufacturing and construction.

Defensive stocks led the gains, with banking shares up by 1.4% and consumer staples climbing 2.1%, supported by a surge in liquor stocks since January's end. Solar companies also saw a notable rally, triggered by reports of visits from Elon Musk-associated teams to China's photovoltaic firms. Meanwhile, AI shares fell sharply amid global concerns over AI's impact on traditional software markets, dragging down related indices.